News released on Wednesday morning an hour before the RTH open.

<image: Trading off News Reaction Highs and Lows>

And the reaction was to spike higher and then lower and settle back within the range.

<image: Trading off News Reaction Highs and Lows>

Interesting. That’s not quite what I expected, but it creates two levels worth watching.

<image: Trading off News Reaction Highs and Lows>

Two levels that define a clear boundary between bullish, neutral and bearish zones.

And two levels to potentially trade off.

Essentially these work like S/R levels, even though they’re not formed by our usual higher timeframe process.

And so let’s trade…

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

News reactions which cause emotion – in particular trapping out participants in one or more directions – can create levels worth watching.

Keep this in mind for future high impact news events.

There is another take-away here as well. Managing the frustration of early sequences which fail to meet expectations!

Because while you will get sessions which provide that nice one-and-done winner, these sort of days are more common.

Days when you have to fight for it. When your market read is a little out and you’re just not quite catching it.

Days when the market rewards you for patience, for discipline in waiting and watching and biding your time. Setting boundaries for when and where you will trade. And ignoring everything before then.

Sometimes all you need is one good trade. So sit back and let the chop play out. Because when a trapped market finally breaks, it can provide a very nice trend move.

Happy trading,

Lance Beggs

PS. For BOF, BPB and PB trade setups, see here.

 


 

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